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Tata Power today informed the stock exchanges that it will seek shareholders nod to amend a scheme of arrangement to keep Tata Power Solar Systems Ltd (TPSSL) as an independent entity, contrary to its earlier plan to merge it with itself through a postal ballot notice.
Tata Power had given a postal ballot notice to amend an amalgamation scheme to keep the TPSSL as a separate entity and let it continue as a wholly-owned subsidiary of the company, rather than merging it with the company as envisaged under the composite scheme, according to a BSE filing.
The company explained that in recent months, there have been numerous favourable policies of the government to promote and encourage entities engaged in solar manufacturing, including production linked incentive scheme to make high-efficiency solar PV modules, and the imposition of basic customs duty on the import of solar cells/modules, etc. to scale up domestic solar manufacturing, including exporting solar cells/modules.
TPSSL is in the solar manufacturing business, and the government policies will help it further expand its existing manufacturing capacities to avail these benefits/incentives and create more shareholder value to the company and its shareholders, the filing said.
Therefore, the company said it was felt that it would be commercially prudent and desirable by the Board of Directors as well as the Transferor Companies to keep TPSSL as a separate entity and let it continue as a wholly-owned subsidiary rather than merging it with the company as envisaged under the composite scheme.
The Board and the Transferor Companies, at their respective meetings held on July 1, 2021, have decided to amend the composite scheme and withdraw the amalgamation of TPSSL with the company, and accordingly, approved the amendment to the Composite Scheme.
The amended composite scheme (post exclusion of TPSSL) will now comprise the amalgamation of CGPL (Coastal Gujarat Power Ltd) with the company and consequential capital reorganisation.
Further, under the amended composite scheme, no consideration will be discharged, either in the form of shares or otherwise, by the company to CGPL being a wholly-owned subsidiary.
Thus, it stated that there is no valuation exercise to be undertaken in relation to the amended composite scheme and therefore, there will also be no requirement for obtaining a fairness opinion.
According to the amended composite scheme, the rights of equity shareholders will not be adversely impacted as even currently, the financial accounts of CGPL and TPSSL (being wholly-owned subsidiaries of the company) are consolidated with the company, and the amended Composite Scheme will not impact its financial position.
Further, the filing said TPSSL would continue to remain a wholly-owned subsidiary.
The Board of Tata Power Company on August 12, 2020, had approved the composite scheme of arrangement among CGPL and TPSSL and Tata Power Company and their respective shareholders.
CGPL and TPSSL are collectively referred to as Transferor Companies. The remote e-voting period will commence on Wednesday, November 3, 2021, at 9:00 am (IST) and end on Thursday, December 2, 2021, at 5:00 pm.
